The blowback for consumers could be significant at a time when households are already reeling from years of rising prices. Even though inflation has moved closer to normal levels lately, spikes in the wake of the pandemic pushed up the cost of new cars, groceries, utilities and housing by at least 20 percent in four years, outstripping pay increases in the same period. Discontent with inflation has soured Americans’ view of the economy and played a major role in Trump’s presidential win.
“The biggest takeaway from this election was that Trump won because people really hated inflation; they hated seeing prices rise,” said Alex Durante, an economist at the Tax Foundation, a right-leaning think tank. But, he said, Trump’s proposed policies could quickly make that situation worse. “Tariffs make things more expensive. They shrink the economy, and they make people poorer.”
Members of Trump’s transition team have pushed back against the idea that tariffs would spark widespread inflation. Even if some prices rise, those increases would be offset by lower demand elsewhere, treasury secretary pick Scott Bessent said in a recent radio interview.
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